Insurance aggregator Policy Bazaar is reportedly holding talks with Japanese investment & telecom giant SoftBank for raising fresh funds. The online insurance company is seeking to raise fresh capital at a valuation of nearly $800 million. A healthy jump from the previous valuation of $500 million during its last fundraising round last year.
However, reliable sources have claimed that the talks are still in early stage and therefore there is still lot of uncertainty over whether talks will fructify into a deal or not. Nonetheless, if the talks do reach final stage, Softbank cannot invest more than 49% in Policy Bazaar, since there is a limitation cap imposed on foreign investment by insurance regulator IRDA.
The insurance startup’s existing foreign investors include big names like Tiger Global and Temasek Holdings, with both holding nearly 48% stake in the firm. It also boasts several high profile domestic investors like Info Edge, Ribbit Capital and Premji Invest.
Policy Bazaar is essentially aiming at disrupting the insurance market, which is currently dominated by public and private companies, most of which are traditional brick and motor companies. Ever since its inception in 2008, this Gurgaon based company has been steadily climbing the ladder of success. As a result, it over the years has not only succeeded in attracting strong interest from big investors, but has also become the poster boy of the online insurance industry.
However, Policy Bazaar faces immense regulation challenges from the IRDA as well as increasing competition in the market. In the future, Policy Bazaar’s competition may not emanate only from other online aggregators, but also from big e-tailers like Flipkart. The homegrown online shopping giant has already expressed interest in selling insurance products on its portal.
Meanwhile, if SoftBank does invest in the online insurance aggregator, it will result in yet another high profile investment for Japanese giant in the Indian market. Some of SoftBank’s high profile bet in India includes Ola, Flipkart, Oyo Rooms and Paytm.